Emergent Research

EMERGENT RESEARCH is focused on better understanding the small business sector of the US and global economy.

Authors

The authors are Steve King and Carolyn Ockels. Steve and Carolyn are partners at Emergent Research and Senior Fellows at the Society for New Communications Research. Carolyn is leading the coworking study and Steve is a member of the project team.

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Disclosure Policy

Emergent Research works with corporate, government and non-profit clients. When we reference organizations that have provided us funding in the last year we will note it.
If we mention a product or service that we received for free or other considerations, we will note it.

Of those planning to become self-employed, 18% say they intend to make the move in the next year and 28% say they will do so in 3 years.

The study also surveyed people who are currently self-employed.

They found that 90 percent of the self-employed said they enjoyed being their own boss.

They also found over half said they made more working for themselves than in their prior jobs.

In terms of challenges, about half of the self-employed reported having experienced irregular income and 7 in 10 said it's harder to get a mortgage when you're self-employed (the bank that did the study provides a special mortgage for the self-employed).

Regular readers will notice these findings are similar to pretty much all of the studies on the self-employed.

This includes the finding on the percentage of Brits planning to become self-employed. It's similar to our study results (and other study results) on U.S. workers.

At this point you'd almost have to live in a cave to not be aware of the trend towards increased self-employment. And while that may be an overstatement, you certainly wouldn't be reading this blog unless you're aware of it.

So we won't bother covering the report in any detail, except to point out 3 of its charts.

These charts also don't contain anything new.

But they point out yet again some important data that isn't necessarily widely known or accepted. I say yet again the because the findings below echo pretty much all studies on the self-employed.

The first is the self-employed are, on average, more satisfied with work than traditional employees are.

The CIPD chart below even breaks it down into different kinds of self-employed, all of which are more satisfied than traditional employees (click on the chart to enlarge).

The second chart shows the self-employed score better on a series of well-being questions than traditional employees do.

The third chart shows the self-employed have more positive and less negative views towards their work than traditional employees do.

Regular readers knowwe've been reporting on data like this for over a decade. We've also long reported on the downsides of being self-employed, including the people exploited by the dark side of self-employment.

49 percent of contract workers have income that varies from month to month or seasonally.

65 percent of contract workers are male and 62 percent are under 45.

66 percent of part-time workers prefer that kind of schedule.

56 percent of workers received a raise in the past year.

84 percent of workers are not worried that they will lose their job in the next year.

54 percent of workers think it would be difficult to relocate for a better job.

Overall the survey results are consistent with the growing number of other gig economy surveys.

The major exception is this survey found that 65% of contract workers are male. This is substantially higher than pretty much every other gig economy survey, which find close to a even split between male and female gig workers.

This is likely due to how they asked their contract worker question. They asked:

Thinking about your work arrangement, are you a contract worker, that is, someone who has been hired to work on a specific project or for a fixed period of time?

This question eliminates several gig/independent worker segments that tend to skew female. For example, Etsy sellers would not be included, nor would care givers, nor would a variety of others who are self-employed/freelancers.

There's also a large margin of error associated with their contract worker data. They surveyed roughly 1200 Americas of which roughly 800 said they were "workers". Of this 800, 20% said they were contract workers. This means their contract worker data is based on only 160 respondents. This results in a margin of error of almost +- 8% on their contract worker responses.

So when they say 65% of contract workers are male, they're really saying somewhere between 57% and 73% of contract workers are likely male.

So as with all surveys, you have dig into the methodology to fully understand the results.

First, NPR covering contract work in-depth is a clear signal that the gig economy is large and growing is now widely accepted. This was not true even as recently as 2-3 years ago.

NPR's series also presents both the good and bad sides of the gig economy in a balanced manner. This too is relatively new.

In the past, most gig economy press coverage was either very positive or very negative - and most stories were negative. NPR's coverage shows that there is a better mainstream understanding of the pluses and minuses of gig work.

The book is written by the well-known and highly respected small business expert Elaine Pofeldt. She explains how to identify, launch and grow a single person business that can generate $1 million or more in revenue.

The book is based on hundreds of interviews Elaine has conducted with successful solopreneurs. Because of this, it's filled with practical advice from those who have accomplished the challenging task of reaching $1 million in revenue.

We liked the entire book, but our favorite part is Chapter 4 - Making It Happen. This chapter has the nuts and bolts advice about building a successful solopreneur business.

We particularly liked the section Experiment and Revise (page 113). Being able and willing to adapt, adjust and pivot is almost always a prerequisite to business success. This section nicely and usefully lays out how several successful solopreneurs did this.

We also found the section on Useful Resources to be very helpful. It's a one stop shop of the tools and hacks that can be used to automate work and business processes.

The value of automation is stressed throughout the book (you simply can’t build a large solopreneur business without using automation tools) and this section provides a list of the tools to make this happen.

The Million-Dollar One-Person Business is clearly aspirational. As the book points out, there were only about 36,000 single person businesses in the U.S. with a million or more in revenue in 2015.

But this book is not just for those who want to reach $1 million in revenues.

Anyone who wants to build a high income solo business will find the information in this book extremely valuable. And a growing number of Americans are building high income solo businesses.

As the chart below shows, over 3 million American solopreneurs reported earning more than $100k in 2017. This is up from just a bit over 2 million in 2011.

So if you plan on building a $1 million solo business, this is the book for you.

But it's also the book for you if your goal is simply to build a successful solopreneur business of any size. Especially if you want a business that "lets you work the way you want and have the life you want."

January 11, 2018

" ...having to contend with the battle of the interim employee; a growing trend of permanent employees deciding to ‘go interim’."

According to the article, the primary driver is skilled gig workers earn a lot more than traditional employees doing the same work.

The article also points out - and their graphic below illustrates - that this is leading to even relatively young, inexperienced and modestly compenstated consumer goods workers choosing to become contract workers.

Sterling doesn't see this shift as a good thing.

They blame a combination of skilled labor shortages and the industry not being an attractive employer. Key quote:

"Paying sky-high wages for inexperienced employees that yield little to no return, is senseless. The FMCG and food sector must instead, focus their efforts on changing the perception of the industry to attract innovative, motivated and dynamic talent that will drive the industry forward."

FMCG, BTW, stands for "fast moving consumer goods", such as food and things you buy in a grocery or drug store.

This article caught our eye because it's an interesting example of how the war for talent is leading to more skilled professionals becoming independent workers.

It's also interesting in that it's not just older, experienced workers moving to gig work, it's also younger workers doing so.

We're seeing the shift towards independent work in almost every industry - and trends driving this shift show no sign of slowing down.

December 11, 2017

According to a recent survey by the global HR services company Randstad, "More than half of global human capital leaders expect to transfer one-third of their permanent positions to contingent roles in the near future ..."

More than 700 global human capital leaders responded to the Randstad survey.

The study press release has an interesting quote on the growing role contingent talent is playing:

"Companies are increasingly embracing gig workers, and even robots, in their overall workforce to address the increasingly tight labor market in the U.S. and around the world," said Rebecca Henderson, CEO of Randstad Sourceright. "While in the last decade contingent workers have been viewed very differently as compared to full time positions, today's companies are welcoming the opportunity to employ a more agile workforce, particularly as a greater number of gig workers embrace flexible work practices as well."

The report also cites talent scarcity as a major issue and one of the reasons companies are turning to contingent workers.

69% of the respondents said the talent gap is widening and will create greater challenges in the near future, while 25% consider talent scarcity to be their largest concern.

In response, corporations are looking far and wide for needed talent. 74% of those surveyed believe the right person for the job may be an employee, contractor or contingent worker from anywhere in the world.

Many companies are also increasing their training efforts. About half of the respondents said they've increased budgets for their training and reskiling programs.

None of this data comes as a surprise. But it's another confirmation of the trend towards the growing use of contingent labor by corporations.

"the growing adoption of artificial intelligence in the workplace and the expansion of the workforce to include both on- and off-balance-sheet talent."

As their chart below shows (click to enlarge), they see the future workforce being made up of four types of workers.

More interesting is their view about how the relationship between corporations and off-balance sheet workers is going to evolve.

They see corporations hiring two broad types of independent workers. One group - the transactional remote worker - is hired for short term assignments, often through an app or some 3rd party platform. Think hiring people via Amazon Turk to categorize pictures, etc.

The other group - outside contractors - will increasingly work on hybrid teams with traditional employees.

These outside contractors will also tend to stay connected with their client organizations for longer periods of time. Key quote:

As the alternative worker shifts to more rapidly evolving work, the way that work is done is likely to change, moving from short-term transactional remote worker to longer-term relationships that help to accelerate learning and performance improvement.

New York, not surprisingly, has the largest total number of non-employer businesses.

Non-employer statistics are often used as a proxy for self-employment.

This is because a "non-employer businesses" is defined by the U.S. Census Bureau as "one that has no paid employees, has annual business receipts of $1,000 or more ($1 or more in the construction industries), and is subject to federal income taxes."

In other words, non-employers only have an owner. The data comes from IRS tax files and includes full and part-time businesses. About about three-quarters of all U.S. businesses are non-employers.

For a variety of reasons too wonky to go into here, the non-employer stats are an imperfect self-employment proxy (see the U.S. Census non-employer methodology description for more detail). But we consider this data to be a directionally correct measure of self-employment, both in terms of growth and overall size.

You may ask how non-employer data differs from BLS self-employment data.

The quick answer is the non-employer data comes from IRS data, while self-employment data comes from the BLS's monthly current population survey. This means the two data sets aren't really comparable. See this article for more details.

We started tracking the non-employer data back in 2006. It was the dataset that first alerted us to the growth of the gig economy.

November 21, 2017

It has some very interesting data on small businesses and their use of gig workers.

According to the report:

Business owners reported a 37% increase in hiring gig workers over the past six months, compared to increases of 13% for full-time employees, 22% for part-time employees, and 12% for part-time independent contractors.

19.8% of businesses surveyed reported replacing employees (of any type) with contractors over the past six months.

47% of non-employer/solopreneur firms reported hiring part-time workers and/or contractors to help run the business, for an average of 3.2 workers, including the owner.

The top reasons small businesses are hiring contractors and gig workers is shown in the SCORE chart below.

Most people we talk to think cost is the main reason people use gig workers.

But as the chart clearly shows, cost issues are well below accessing specialized talent and the small business only having temporary needs.